How can I get bitcoin?
You can earn it, mine it, or buy it on an exchange. If you can manage to earn it, that’s the best way. Failing that, my recommendation is to buy it on an exchange.
What exchanges do you recommend?
I would recommend you start off acquiring Bitcoin through non-KYC avenues. This includes hodlhodl.com, Bisq, friends/family or face to face local meetups. However, the volume on these services are thin and it can be more expensive. As people become aware of these services, the issues will resolve over time. Take a look at these avenues first before you move on to regulated exchanges.
There’s a listing of regulated Australian exchanges that can be found here. Take a look at the fees they charge and the features they have. Don’t necessarily go with the first one on the list, there might be a relationship you’re not aware of. Do your research. Understand that to buy bitcoin on an exchange you will need to provide the exchange with government issued identification. This process is known as Know Your Customer (KYC). Exchanges must comply with this, otherwise they face getting shut down. I don’t agree with it, but that’s unfortunately the system we have today.
Why would I want bitcoin right now?
I recommend buying bitcoin to defend yourself against government issued currency inflation and economic mismanagement from central banks. In my opinion, at this point in time, Bitcoin’s number one use case is to store value over a long period of time. Bitcoin is able to achieve this because of a technological breakthrough in computing science. For the first time, in the history of humanity, we have created a good (either physical or digital) that is absolutely finite in supply and we can verify the supply at any point in time (past and future). This gives us the stability we need to make long term decisions that we’ve never been able to do before. The next best use case is to have complete ownership over how you spend your funds and when you spend them. No third party can freeze, seize or stop your funds. This property of Bitcoin is called censorship resistance. These may not be compelling reasons today, sitting in Australia’s ‘economic bliss’. However, I believe it would not hurt to allocate a small percentage of wealth or income just in case tomorrow paints a different picture.
Saifedean Ammous suggests it’s a way for you to store some of your earnings for the very long term without needing constant active management, investment expertise, trusting agents & financial planners, or recurring management fees.
How many bitcoins should I buy?
Keep in mind you do not have to buy whole bitcoins costing thousands of dollars. You can buy fractions of bitcoins (satoshis) amounting to any Australian dollar equivalent. My recommendation is to not buy more than you are willing to lose. This figure will be different for different people. Some people find buying bitcoin on a regular (weekly, fortnightly, monthly) basis to be an effective strategy. This strategy is called dollar cost averaging, or colloquially termed, stacking sats. You can practically do this using:
When’s the best time to buy bitcoin?
Yesterday. Failing that, today. Do not worry about what the price is today. My recommendation is to not time the market for when it’ll be cheaper. Be wary of charlatans who believe they can.
What should I do before buying bitcoin?
Make a plan.
That plan should involve how to get your bitcoins off the exchange so you have ownership of the coins, rather than leaving them in the exchange’s custody. To do this, I recommend buying a hardware wallet (e.g. a Trezor or Coldcard) and perhaps a Cryptosteel to store your private keys and seed mnemonic. Read the instructions and manual of these products carefully. You can buy a Coldcard from our site here.
When purchasing a hardware wallet on an online store, I would recommend you have it shipped to an address that is different to where you intend to keep the hardware wallet. You may wish to order it to your work address, a GPO Box or a free Australia Post Parcel Locker. Consider doing this for all online shopping.
Are there any tax implications?
Yes, the Australian Taxation Office (ATO) have released their view on bitcoin on their website here.
Consider every trade (buy or sell) you make on a regulated exchange as having been reported to various government bodies such as the ATO, AUSTRAC, ASIO etc.
The ATO considers Bitcoin as an asset which, when disposed, triggers a capital gains tax event. It also considers earning bitcoin as assessable income. You could argue that the ATO is, in some sense, ‘encouraging’ the holding of bitcoin. My view is that laws change depending on the rhetoric of the day, and as such we can expect more changes to laws in the coming years.
Are there any privacy concerns?
The exchange you bought bitcoin on will know which bitcoin address you transferred your bitcoin to.
If you’ve used the Trezor via its web application to receive the bitcoins off the exchange, consider Trezor to now know that bitcoin address and all future transactions from the wallet. Trezor does not necessarily personally identify you, but they would know your IP address, which can be linked back to you.
There are ways you can defend yourself against this, but it is a more advanced topic that you can read in your own time.
What can I buy with my bitcoin?
A bit of a conflict of interest here, but if you really want to spend some bitcoin, attend one of our webinars, or visit the Ministry of Nodes web store to buy bitcoin related books and paraphernalia. If you like, you can elect for local pickup and we can arrange to meet. We’re always keen to meet new Bitcoiners!
What about other cryptocurrencies offered on the exchange? Do you recommend buying those?
What about Initial Coin Offerings (ICOs)?
The company I’m working for is thinking of something something blockchain and something something distributed ledger technology! Should I get involved?
Could you give me an unbiased view on the case against bitcoin?
I don’t have to. Many ‘reputable’ news outlets, journalists, economists and government representatives have been doing it for me since 2009. You can view an entire list of articles published predicting the demise of bitcoin here. None of them have come to fruition. Yet.
When should I sell my bitcoin?
Where can I find more information?
Read more of our articles and content on ministryofnodes.com.au, or attend our webinars for more guidance. Follow us on twitter @ministryofnodes @stephanlivera @_k3tan